Annual Report 2008 · 2017. 1. 27. · 2 Tamron Co., Ltd. It is my pleasure to present a report on...

Annual Report 2008

TCL-08-AR.indd cover:1 09.6.12 10:37:06 AM

Corporate Philosophy

With its firm commitment to developing high-quality, innovative and

technologically advanced products that satisfy customer needs, Tamron is

securing a leading position in the worldwide optical industry.

Our primary objective is to sustain strong corporate growth based on

a high level of customer satisfaction achieved by providing superior

products at the right price, thus also contributing to the prosperity of

our shareholders and employees.

Customers

ShareholdersEmployees

CorporatePhilosophy

We at Tamron are advancing into the 21st century with our corporate philosophy to guide our mission.

corporate profile

Mission

financial highlights ................................................................................. 1message from the president ................................................................... 2management’s discussion and analysis ................................................ 3group network overview .......................................................................... 9consolidated balance sheets ................................................................. 10consolidated statements of income .................................................... 12

consolidated statements of changes in net assets ....................... 13consolidated statements of cash flows ............................................ 14notes to consolidated financial statements .................................. 15independent auditors’ report ................................................................ 24management/investor information ..................................................... 25

50 Years in Pursuit of “Light”

We at Tamron are pursuing a dream.

For the 50 years that Tamron has been supported by its product users throughout the world, we have pursued many

dreams and challenged the unknown in a spirit of creativity and faith in ourselves. To fulfi ll these dreams, we have

created products and markets that did not previously exist, and strode forward to meet the new world of the future

strengthened by the ideas of each of us at Tamron raised in the fi elds of development, sales and production.

Tamron...“New eyes for industry”

The new challenge starts now as a comprehensive optical manufacturer capable of integrating digital technologies with

optics.

Preface

table of contents

Note: In the 2008 annual report, amounts of less than the unit indicated, for example, one million yen, one thousand yen or one thousand dollars, have been omitted.


Tamron Co., Ltd. 1

Millions of Yen

Thousands of U.S. Dollars

(Note 1)

Years ended December 31 2008 2007 2006 2005 2004 2008

For the Year:

Net sales ¥ 62,537 ¥ 68,204 ¥ 63,685 ¥ 59,607 ¥ 63,345 $687,219

Operating income 6,198 8,788 6,625 4,803 7,223 68,114

Income before income taxes 4,337 7,642 5,610 4,431 6,589 47,666

Net income 3,029 4,772 4,028 3,343 4,474 33,288

At Year-End:

Total assets ¥ 49,176 ¥ 52,151 ¥ 49,528 ¥ 44,081 ¥ 40,857 $540,400

Net assets 33,126 35,261 31,525 28,341 24,891 364,031

Number of employees 5,571 5,064 5,024 3,672 3,232 —

YenU.S. Dollars

(Note 1)

Per Share Data:

Net income ¥ 108.41 ¥ 169.19 ¥ 142.82 ¥ 117.48 ¥ 323.52 $ 1.19

Shareholders’ equity 1,206.77 1,250.02 1,117.59 1,003.63 1,761.96 13.26

Cash dividends 50.00 50.00 40.00 45.00 40.00 0.55

Notes: 1. U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥91=U.S.$1.

2. Net income per share is computed based on the weighted-average number of shares of common stock outstanding during each year.

3. Net income per share for FY2005 is calculated accounting for the two-for-one stock split on August 19, 2005.

4. Cash dividend for FY2006 includes a commemorative dividend of ¥5 per share for listing on the 1st section of the Tokyo Stock Exchange

financial highlightsTamron Co., Ltd. and Consolidated Subsidiaries

04 05 06 07 0804 05 06 07 08

NET SALES

59,607

68,204

04 05 06 07 08

63,345

(Millions of Yen)

4,803

8,788

7,223

OPERATING INCOME(Millions of Yen)

3,343

63,685

6,6254,028

4,77262,537

6,1983,029

4,474

NET INCOME(Millions of Yen)

TCL-08-AR.indd 1 09.6.12 10:37:07 AM

2 Tamron Co., Ltd.

It is my pleasure to present a report on our business and fi nan-

cial performance for fi scal year ended December 31, 2008.

During the term under review, the global economy made a

drastic downturn and the recession was offi cially acknowl-

edged in the US as well as in the major European countries.

A credit crunch intensifi ed after the collapse of Lehman

Brothers made a negative impact to corporate earnings and

employment, leading to a deterioration of personal consump-

tion especially in the US.

Japanese economy, being affected by a worldwide economic

downturn as well as a steep appreciation in the yen value

along with a meltdown of stock market, was doomed to lower

corporate earnings, a substantial decline in industrial produc-

tion and a sharp deterioration of employment.

As for the market segments in which Tamron and group com-

panies are involved, digital still cameras experienced a sharp

decline in prices and shipments in the 4th quarter affected

by an economic downswing although the total shipment for

the year posted a slight year-on-year increase.

Under those negative circumstances, sales of Tamron and

group companies increased both in Photographic and Indus-

trial-commercial Optics business segments but decreased in

Optical Components segment mainly due to the yen apprecia-

tion compared with the previous year. As a result, consolidated

net sales for fi scal year recorded ¥62,537 million, a decrease

of 8.3% year on year. As for the profi ts, a decrease in gross

profi t attributable to the sales decline and an increase in the

expenses for sales and general administration, resulted in an

operating income of ¥6,198 million and an ordinary income

of ¥5,842 million, a decrease of 29.5% and 24.2% over the

same period of last year respectively. Net income after tax and

special items stood at ¥3,029 million, a decrease of 36.5%

year on year, accounted for the reserve for a special loss on

the withdrawal from the Pension Fund along with a valuation

loss on the marketable securities.

In line with our fundamental philosophy to ensue a steady

return to our shareholders, we have decided to reward ¥50

per share for full-year cash dividend (interim dividend of ¥25

per share and year-end dividend of ¥25 per share), the same

amount per share as the previous year, achieving a payout

ratio of 46.1%.

I would appreciate your continued support and encourage-

ment in the future.

President & CEO

Morio Ono

message from the president

TCL-08-AR.indd 2 09.6.12 10:37:07 AM

Tamron Co., Ltd. 3

management’s discussion and analysis

In this Annual Report, “Tamron,” “the Company,” “we,” “us,”

“our” or “ours” mean Tamron Co., Ltd. and consolidated sub-

sidiaries unless otherwise specifi ed.

Operating Result

Term Overview

In fi scal year 2008, net sales of Optical Component business

decreased by ¥10,042 million mainly due to the appreciation

of the yen against the US dollar compared with the previous

year along with a sharp decline in sales price and market de-

mand, although net sales of Photographic business increased

by ¥3,592 million. As a result, net sales decreased 8.3% to

¥62,537 million, a decrease of ¥5,666 million compared with

the previous year.

Operating income decreased 29.5% to ¥6,198 million and

ordinary income decreased 24.2% to ¥5,842 million, a de-

crease of ¥2,590 million and ¥1,869 million compared with

the previous year respectively.

Income before income tax also decreased 43.2% to ¥4,337

million accounted for the reserve for a special loss on the

withdrawal from the Pension Fund along with a valuation loss

on the marketable securities. As a result, net income recorded

a year-on year decrease of 36.5% to ¥3,029 million.

Cash Flow

Cash and cash equivalents at the end of fi scal year 2008

totaled ¥10,752 million, a year-on-year decrease of ¥2,768

million.

Net cash from operating activities amounted to ¥6,947

million, a year-on-year increase of 3.7%, mainly associated

with net income before income tax totaling ¥4,337 million,

depreciation and amortization totaling ¥4,100 million, in-

crease in inventory totaling ¥1,611 million and income tax

payment totaling ¥2,165 million.

Net cash used in investing activities totaled ¥5,773 mil-

lion, a year-on-year increase of 31.5% mainly due to the

acquisition of tangible f ixed assets amounted to ¥4,600

million.

Net cash outfl ow from fi nancing activities totaled ¥3,100

million, a year-on-year increase of 41.4%, mainly due to the

purchase of treasury stock totaling ¥1,500 million and the

disbursement of dividends of ¥1,693 million.

Capital Expenditure

Total capital expenditure amounted to ¥4,772 million mainly

due to the acquisition of machining equipment to enhance in-

house production of key parts and components in TAMRON

OPTICAL (FOSHAN) CO., LTD in China as well as an

increase in the production of injection molds to support new

product development.

Capital expenditure for Photographic Products business

totaled ¥2,064 million, refl ecting major investment in injec-

tion molds production for new product of interchangeable

lenses for digital SLR cameras.

Capital expenditure for Optical Components business

totaled ¥1,980 million, refl ecting major investment in pro-

duction equipment for digital still camera lenses and lens

processing.

Capital expenditure for Commercial/Industrial-use Optics

business totaled ¥659 million refl ecting mainly investment

in injection molds to support new product development for

CCTV camera lenses in line with the expansion of security

and surveillance market.

There is no sale or retirement of assets of great importance

in fi scal year 2008.

TCL-08-AR.indd 3 09.6.12 10:37:07 AM

4 Tamron Co., Ltd.

Research and Development

Tamron conducts research for core technologies through its

Optical Design & Engineering R&D Unit, Core Technology

& Engineering R&D Unit and Integrated Core Technology

R&D Unit and for product development through Design &

Engineering Department of respective business units.

In fi scal year 2008 total R&D expenses amounted to

¥3,222 million, resulting from development of new inter-

changeable lenses for digital SLR cameras, new lenses for

digital still cameras and camcorders, CCTV camera lenses

for mega-pixel camera applications as well as development of

ultra compact zoom lens for mobile phone camera and lenses

for automotive vision system aiming at future expansion of

business.

As for Photographic Products business, we launched three

new interchangeable lenses for digital SLR cameras, which

were new high-speed zoom lens 70-200mm F/2.8 Di (Model

A001), world’s fi rst 15X all-in-one zoom lens with built-in Vi-

bration Compensation AF18-270mm F/3.5-6.3 Di II VC and

new ultra-wide-angle zoom lens SP AF 10-24mm F/3.5-4.5

Di II. As a result, R&D expenses for Photographic Products

business totaled ¥1,270 million.

R&D expenses for Optical Component business totaled

¥1,463 million, mainly used for the development of high

power zoom lenses for digital still cameras with high mega-

pixel imager, lenses for high-defi nition camcorders and ultra-

compact 3X optical zoom lens for mobile phone camera with

8MP imager.

In Commercial/industrial-use Optics business, we launched

vari-focal lenses for high mega-pixel CCTV camera applica-

tion and mini-dome camera with built-in high magnifi cation

zoom lens, also promoted development of lenses for automo-

tive vision system application. As a result, R&D expenses

for Commercial/industrial-use Optics business amounted to

¥488 million.

Number of Employees

The number of employees on a consolidated basis was 5,571

as of December 31, 2008 an increase of 507 from the end of

the previous year. On non-consolidated basis, the number of

employees was 1,001, an increase of 86 from the end of the

previous year.

04 05 06 07 0804 05 06 07 0804 05 06 07 08

CAPITAL EXPENDITURE

6,017

4,338

5,587

(Millions of Yen)

2,590

3,052

1,870

R&D EXPENDITURE(Millions of Yen)

3,6723,816

2,5835,024 5,064

4,772

3,222 5,571

3,232

NUMBER OF EMPLOYEES


TCL-08-AR.indd 4 09.6.12 10:37:07 AM

Tamron Co., Ltd. 5

Corporate Governance

We at Tamron upholding our corporate brand message of “New Eyes for Industry” and pursuing our corporate philosophy,

are committed to respecting the rights and equality of shareholders, and maintaining good relationship with all stakeholders

through fair and transparent management.

Corporate Governance structure is as illustrated below. (As of December 31, 2008)

General Meeting of Shareholders

Board of Corporate Auditors Independent Auditor

Board of Directors

CSR Implementation &Administration Board President & CEO

Corporate ManagementCommittee (MAC)

Executive Officer

All Corporate Division

Internal Audit &Supervision Board

CSR Committee

Compliance Committee

Election/Dismissal Election/Dismissal Election/Dismissal

Coordinate

Coordinate

Coordinate

Supervise Financial Audit

TCL-08-AR.indd 5 09.6.12 10:37:07 AM

6 Tamron Co., Ltd.


Long-Term Management Goals

1. Enhancing corporate governance based on CSR manage-

ment system coupled with internal control and risk man-

agement.

2. Implementing management streamline with speedy re-

sponse and actions with process innovation across the

company.

3. Strengthening company-wide resource investment focused

on boosting sales of Tamron-brand interchangeable lenses

for DSLR.

4. Strengthening quality assurance system, further improving

product quality and reliability.

5. Achieving further reduction in cost by means of enhancing

in-house production ratio of critical parts and components

while deploying strategic logistics.

6. Expansion in mobile phone camera lens, and automotive

vision system segments, and development of new business

potentials.

7. Enhancement in R & D activities in core technology de-

velopment revolving around optics and taking proactive

stance in IP strategy.

Business & Other Risks

Items listed in this Annual Report regarding business and

fi nancial conditions that may potentially impact investor deci-

sions are including but not limited to the following risk fac-

tors. Forward-looking statements contained herein are based

upon judgments made by the Company at the time of this

document’s release, March 27, 2009.

1. RELIANCE ON SPECIFIC BUSINESS SEGMENT

AND PRODUCTS

The Company’s sales by business segment and the composition

thereof reveals a high ratio of sales concentrated in lens-related

products having reached 40.0% of our net sales (consolidated),

particularly in the digital camera-related fi elds. Accordingly,

trends in overall market demand for the aforementioned prod-

ucts, or changes in customers’ strategies or sales results may

in turn impact the Company’s fi scal results.

2. RELIANCE ON A FEW KEY CUSTOMERS

A high degree of Company’s sales depends on a Sony EMCS

Corporation (100% owned subsidiary by Sony Corporation),

27.9% (FY2008) of our net sales (consolidated) are sales to

Sony EMCS Corporation. As a result, in cases where the

aforementioned customer implement changes in strategy and

direction, or chooses to alter their business relationship with

the Company, fi scal results may be affected.

3. EXPANDING BUSINESS SEGMENTS AND

ENTERING NEW BUSINESSES

The company plans to increase the scope of its operations

by expanding its cellular phone camera lens business in the

optical components business segment, and by entering the

market for automotive application in the Commercial/In-

dustrial-use Optics business segment. Because the market

demand for these products is projected to grow, the number

of companies entering these fi elds is high. Therefore, severe

price competition, continuous pressure for technological in-

novation, and rapid changes in market needs are expected. In

addition, fi nished product specifi cations may or may not be

well rated in the marketplace, and newly developed products

do not always directly generate sales. Due to these factors, it

is diffi cult to predict rapid changes in the operating environ-

ments of the business that the Company plans to expand or

enter into, and in some cases the Company results may be

affected thereby.

TCL-08-AR.indd 6 09.6.12 10:37:07 AM

Tamron Co., Ltd. 7

4. PROCUREMENT OF RAW AND OTHER

MATERIALS

While the Company has numerous sources from which to

procure most of the necessary raw materials and parts it re-

quires, in the case of glass materials, the Company relies on a

limited number of suppliers. As a results, if for various reasons

raw materials and other parts cannot be obtained according

to plans regarding volume or price, the Company may have

diffi culty achieving its planned production volume. In such

cases, the Company may not be able to fulfi ll delivery obliga-

tions to its customers, which in turn may affect results.

5. DEFECTIVE PRODUCTS

All of the Company’s domestic and overseas development

and production facilities have obtained ISO19001 certifi ca-

tion for quality management system and ISO14001 certifi ca-

tion for environmental management systems, indicating the

Company’s excellent framework regarding quality assurance.

However, the Company cannot fully guarantee that no prod-

uct may at some future point be subject to a recall or product

liability case. In the event that the defective product is the

object of a large-scale recall or product liability case, signifi -

cant expenses could be incurred, or serious damage could be

done to the Company’s credibility. In such case, the Company

results may be affected.

6. RISK SURROUNDING OVERSEAS SUBSIDIARIES

The Company owns sales outlets in the United Sates, Ger-

many, France, and in Shanghai (China). A distribution and

sales company in Hong Kong, and a production company in

Foshan, China.

Following is a list of several inherent risks arising from the

Company’s activities in overseas markets. In cases where such

events occur, the Company results may be affected thereby.

1. Unexpected changes to laws and regulations

2. Unexpected and unfavorable changes in political or eco-

nomic conditions

3. Unfavorable changes in tax policies or tax rates

4. Terrorism, war, natural disaster, epidemics or other factors

contributing to social upheaval

7. CONCENTRATION OF DOMESTIC

PRODUCTION FACILITIES IN AOMORI

PREFECTURE

The Company’s three production facilities in Japan are con-

centrated in the Tsugaru region of Aomori Prefecture. In the

event of an earthquake or other natural disaster, the Com-

pany’s production facilities could be damaged, and production

operations may be severely impacted.

8. INTELLECTUAL PROPERTY

In order to avoid diffi culties surrounding intellectual property,

the Company conducts surveys and negotiations, and actively

applies for intellectual property rights. At present, there are no

instances in which the Company is thought to be in violation

of another party’s intellectual property rights. However, this

does not indicate that the risk of being caught up in litigations

at some future point is nonexistent. In the event of unfavor-

able litigation, fi scal results may be affected.

TCL-08-AR.indd 7 09.6.12 10:37:07 AM

8 Tamron Co., Ltd.

9. ENVIRONMENTAL REGULATIONS

The Company has implemented an environmental management

system that conforms to ISO environmental standards, and is

working actively to implement environmental reforms.

Regarding the ground contamination found during the vol-

untary investigation conducted December 2005 at the Com-

pany’s head offi ce, the Company completed the construction

which it proposed to Saitama City in its “Plan to Halt the

Spread of Groundwater Contamination.”

The company conducted survey at other domestic facilities

such as Hirosaki plant, Namioka plant, and Owani plant has

been confi rmed that all domestic facility environment is ac-

cordance with environmental regulation levels. However, as

environmental laws and regulations are revised, the Company

may discover instances of violations under new regulations.

In such cases, Company results may be affected by related

clean-up costs.

10. DISPOSAL OF INVENTORIES AND

VALUATION LOSS

The Company makes every effort to be thorough in quality

control of products and parts, compliance with environmental

standards, and inventory management. However, changes in

environmental standards, market and technology trends, rapid

transitions in product life cycles and other factors may lead

to unavoidable variations in the valuation of products and

partially fi nished goods. As a result, the Company may need

to dispose of inventories, expense valuation losses to income,

and adopt other measures. In such cases, the Company’s re-

sults may be affected.

11. IMPACT OF CURRENCY EXCHANGE

FLUCTUATION

Transactions between the Company and its overseas sub-

sidiaries and with certain domestic and overseas customers

are conducted either in full or in part in foreign currencies.

Fluctuations in currency exchange rates affect the competi-

tiveness of the Company’s products in foreign markets and

the profi tability of its exports. Accordingly, the Company’s

results may be affected.

12. RESEARCH & DEVELOPMENT COSTS

The Company is investing in new technology for further

expansion of our business and we will continue to invest in

R&D. However, some R&D projects may not progress as

planned, or the Company’s new technology may be eclipsed

by some other technology introduced by our competitors in

the market. In such cases, recovering the investment may pose

a problem, consequently affecting the Company results.

13 IMPACT OF WITHDRAWAL FROM SOCIAL

WELFARE PENSION FUND OF SAITAMA

MACHINE INDUSTRY

The Company having participated in the multiemployer pen-

sion plan managed by Social Welfare Pension Fund of Saita-

ma Machine Industry, informed the Fund of its withdrawal

from the plan by the end of March, 2009 and provided for

the payment of special contributions in conjunction with the

withdrawal amounted to ¥1,149 million as an extraordinary

loss for fi scal year 2008. However, the withdrawal is subject

to the approval of Representative Board of the Fund and the

Ministry of Health, Labour and Welfare. In addition, the

aforementioned special contributions may be raised depend-

ing on the circumstances. In such cases the Company’s result

may be affected.


TCL-08-AR.indd 8 09.6.12 10:37:07 AM

Tamron Co., Ltd. 9

group network overview

Tamron group comprise Tamron Co., Ltd. (Japan) and six other subsidiaries. Main business drivers are the following three

segments, Photographic Products, Optical Components, and Commercial/Industrial-use Optics.

The details of the business segments are as follows.

Business Segment Main Business Related Business Groups

Photographic Products Interchangeable lenses for SLR camera Tamron Co., Ltd.TAMRON USA, INC.TAMRON Europe GmbH.TAMRON France EURL.TAMRON INDUSTRIES (HONG KONG) LIMITEDTAMRON OPTICAL (FOSHAN) CO., LTD.TAMRON OPTICAL (SHANGHAI) CO., LTD.

Optical Components Camcorder lensesDigital still camera lensesCellular phone camera lenses

Tamron Co., Ltd.TAMRON INDUSTRIES (HONG KONG) LIMITEDTAMRON OPTICAL (FOSHAN) CO., LTD.TAMRON OPTICAL (SHANGHAI) CO., LTD.

Commercial/Industrial-use Optics Lenses for CCTV camerasProjection lensesHigh-precision moldsInjection-molded parts & componentsOptical device units

Tamron Co., Ltd.TAMRON USA, INC.TAMRON Europe GmbH.TAMRON INDUSTRIES (HONG KONG) LIMITEDTAMRON OPTICAL (FOSHAN) CO., LTD.TAMRON OPTICAL (SHANGHAI) CO., LTD.

Overview of the relationships and the fl ow of products, and parts & raw materials are as illustrated below.

Customers (Domestic & Overseas)

(Overseas Distribution / Overseas Sales Subsidiaries)

TAMRON INDUSTRIES(HONG KONG) LIMITED

Tamron Co., Ltd.( JAPAN)

Consolidated SubsidiariesFlow of Parts & Raw MaterialsFlow of Finished Products

(Overseas Production Plant / Overseas Sales Subsidiaries)

TAMRON OPTICAL (FOSHAN) CO., LTD.

(Overseas Sales Subsidiaries)

TAMRON USA, INC.

TAMRON Europe GmbH.(Germany)

TAMRON France EURL.

TAMRON OPTICAL(SHANGHAI) CO., LTD.

TCL-08-AR.indd 9 09.6.12 10:37:07 AM

10 Tamron Co., Ltd.

consolidated balance sheetsTamron Co., Ltd. and Consolidated Subsidiaries

Thousands of YenThousands ofU.S. Dollars

December 31 2008 2007 2008

assets

Current assets:

Cash and cash equivalents ¥10,752,065 ¥13,520,940 $118,154

Notes and accounts receivable-trade 9,499,434 11,353,082 104,389

Inventories 7,959,494 7,065,004 87,466

Deferred tax assets 830,972 314,517 9,131

Other current assets 1,093,531 750,259 12,016

Reserve for doubtful accounts (71,949) (78,611) (790)

Total current assets 30,063,549 32,925,193 330,368

Fixed assets:

Tangible fi xed assets

Buildings and structures 4,227,128 4,709,603 46,451

Machinery, equipment and vehicles 6,365,041 6,126,219 69,945

Tools, furniture and fi xtures 2,562,490 2,218,078 28,159

Land 754,947 801,659 8,296

Other 432,503 728,458 4,752

Total tangible fi xed assets 14,342,112 14,584,019 157,605

Intangible fi xed assets 1,687,809 1,922,814 18,547

Investments and other assets

Investment securities 1,066,642 853,662 11,721

Deferred tax assets 640,190 566,164 7,035

Other 1,383,277 1,308,802 15,200

Reserve for doubtful accounts (7,110) (9,362) (78)

Total investments and other assets 3,083,000 2,719,266 33,879

Total fi xed assets 19,112,922 19,226,100 210,032

Total assets ¥49,176,471 ¥52,151,293 $540,400

The accompanying notes are an integral part of these statements.

TCL-08-AR.indd 10 09.6.12 10:37:07 AM

Tamron Co., Ltd. 11


December 31 2008 2007 2008

liabilities and net assets

Current liabilities:

Notes and accounts payable-trade ¥ 3,694,320 ¥ 4,627,409 $ 40,596

Short-term loans payable 4,781,966 4,850,172 52,549

Income taxes payable 708,100 1,096,856 7,781

Accrued directors’ bonuses 69,000 71,000 758

Reserve for loss on withdrawal from Pension Fund 1,149,664 — 12,633

Other current liabilities 2,966,113 3,413,373 32,594

Total current liabilities 13,369,164 14,058,812 146,913

Long-term liabilities:

Long-term loans payable 1,274,848 1,461,220 14,009

Reserve for employees’ retirement benefi ts 1,134,728 1,104,502 12,469

Reserve for directors’ retirement benefi ts — 251,271 —

Other long-term liabilities 270,819 14,100 2,976

Total long-term liabilities 2,680,395 2,831,093 29,454

Total liabilities 16,049,560 16,889,905 176,368

net assets

Shareholders’ equity:

Common stock 6,923,075 6,923,075 76,077

Capital surplus 7,440,327 7,440,327 81,761

Retained earnings 21,790,201 20,453,466 239,452

Treasury stock, at cost (1,521,227) (21,042) (16,716)

Total shareholders’ equity 34,632,377 34,795,826 380,575

Unrealized gains and adjustments:

Net unrealized gains (loss) on investment securities (9,455) 117,563 (103)

Foreign currency translation adjustments (1,496,010) 347,997 (16,439)

Total unrealized gains and adjustments (1,505,465) 465,560 (16,543)

Total net assets 33,126,911 35,261,387 364,031

Total liabilities and net assets ¥49,176,471 ¥52,151,293 $540,400

TCL-08-AR.indd 11 09.6.12 10:37:07 AM

12 Tamron Co., Ltd.

consolidated statements of incomeTamron Co., Ltd. and Consolidated Subsidiaries


Years ended December 31 2008 2007 2008Net sales ¥62,537,972 ¥68,204,841 $687,230Cost of sales 43,676,836 47,353,316 479,965Gross profi t 18,861,136 20,851,524 207,265Selling, general and administrative expenses: Advertising expenses 1,038,066 1,041,905 11,407 Sales promotion expenses 434,881 440,466 4,778 Provision for doubtful accounts 11,114 10,775 122 Employees’ salaries, wages and bonuses 2,878,826 2,708,803 31,635 Provision for directors’ bonuses 69,000 71,000 758 Employees’ retirement benefi t expenses 110,747 115,927 1,217 Provision for directors’ retirement benefi ts — 56,537 — Research and development expenses 3,135,621 2,990,032 34,457 Other expenses 4,984,464 4,627,116 54,774 Total selling, general and administrative expenses 12,662,722 12,062,564 139,150Operating income 6,198,413 8,788,960 68,114Non-operating income: Interest and dividend income 79,561 83,558 874 Gain on sales of investment securities 14 31,702 0 Insurance income 34,525 — 379 Other 146,160 198,797 1,606 Total non-operating income 260,261 314,058 2,860Non-operating expenses: Interest expenses 161,098 246,512 1,770 Loss on foreign exchange 137,885 87,780 1,515 Loss on disposal of inventories 226,384 753,746 2,487 Loss on disposal of fi xed assets 38,312 232,755 421 Other 52,855 70,140 580 Total non-operating expense 616,536 1,390,934 6,775Ordinary income 5,842,137 7,712,084 64,199Extraordinary income: Reversal of reserve for doubtful accounts — 3,793 — Total extraordinary income — 3,793 —Extraordinary loss: License fee for prior periods — 73,160 — Reserve for loss on withdrawal from Pension Fund 1,149,664 — 12,633 Loss on valuation of investment securities 354,819 — 3,899 Total extraordinary loss 1,504,483 73,160 16,532Income before income taxes 4,337,653 7,642,718 47,666Income taxes 1,833,548 2,342,728 20,148Additional income taxes for prior periods — 713,790 —Tax refund — (64,995) —Income tax—deferred (525,155) (121,362) (5,770) Net income ¥3,029,260 ¥4,772,557 $33,288

Net income per share (in yen and U.S. dollars) ¥ 108.41 ¥ 169.19 $ 1.19


TCL-08-AR.indd 12 09.6.12 10:37:07 AM

Tamron Co., Ltd. 13

consolidated statements of changes in net assetsTamron Co., Ltd. and Consolidated Subsidiaries

Thousands of YenStockholders’ equity

Year ended December 31Common

stockCapitalsurplus

Retainedearnings

Treasurystock

Total shareholders’ equity

Balance of December 31, 2007 ¥6,923,075 ¥7,440,327 ¥20,453,466 ¥ (21,042) ¥34,795,826Changes in term Dividends from surplus (1,692,525) (1,692,525) Net income 3,029,260 3,029,260 Purchase of treasury stock (1,500,185) (1,500,185)Total change in term — — 1,336,735 (1,500,185) (163,449)Balance of December 31, 2008 ¥6,923,075 ¥7,440,327 ¥21,790,201 ¥(1,521,227) ¥34,632,377

Thousands of YenChanges in unrealized gain and translation adjustments

Year ended December 31

Net unrealized gain on marketable

investment securities

Foreigncurrency

translation adjustments

Totalunrealized gain and translation

adjustmentsTotal net

assets

Balance of December 31, 2007 ¥117,563 ¥ 347,997 ¥ 465,560 ¥35,261,387Changes in term Dividends from surplus (1,692,525) Net income 3,029,260 Purchase of treasury stock (1,500,185) Net change of items other than stockholders’ equity (127,019) (1,844,007) (1,971,026) (1,971,026)Total change in term (127,019) (1,844,007) (1,971,026) (2,134,476)Balance of December 31, 2008 ¥ (9,455) ¥(1,496,010) ¥(1,505,465) ¥33,126,911


TCL-08-AR.indd 13 09.6.12 10:37:08 AM

14 Tamron Co., Ltd.

consolidated statements of cash flowsTamron Co., Ltd. and Consolidated Subsidiaries


Years ended December 31 2008 2007 2008Cash fl ows from operating activities: Income before income taxes ¥ 4,337,653 ¥ 7,642,718 $ 47,666 Depreciation and amortization 4,100,322 3,106,615 45,058 Increase in reserve for directors’ bonuses (2,000) 19,400 (21) Increase in reserve for loss on withdrawal from Pension Fund 1,149,664 — 12,633 Increase in reserve for employees’ retirement benefi ts 30,226 91,497 332 Interest and dividend income (93,020) (88,350) (1,022) Interest expense 161,098 246,512 1,770 Loss on disposal of fi xed assets 38,312 232,755 421 Gain on sale of investment securities (14) (31,702) — Loss on valuation of investment securities 354,819 — 3,899 Increase in trade receivables 1,124,436 (362,515) 12,356 Decrease in inventories (1,611,123) 38,655 (17,704) Increase (decrease) in trade payables (319,769) (846,082) (3,513) Other—net (81,966) (115,735) (900) Sub total 9,188,640 9,933,767 100,974 Interest and dividend received 92,820 88,350 1,020 Interest paid (167,866) (246,007) (1,844) Income taxes paid (2,165,954) (3,143,682) (23,801) Income taxes refunded — 64,995 — Net cash provided by operating activities 6,947,620 6,697,424 76,347Cash fl ows from investing activities: Purchases of tangible fi xed assets (4,600,303) (3,915,102) (50,552) Purchase of intangible fi xed assets (350,941) (205,369) (3,856) Purchase of investment securities (780,942) (502,562) (8,581) Proceeds from sale of investment securities 37 230,692 — Increase in loans receivable (7,700) (16,565) (84) Proceeds from collection of loans receivable 19,160 7,994 210 Other—net (52,329) 11,373 (575) Net cash used for investing activities (5,773,020) (4,389,540) (63,439)Cash fl ows from fi nancing activities: Net increase in short-term loans 388,687 719,254 4,271 Proceeds from long term-loans 1,200,000 150,000 13,186 Repayment of long-term loans (1,494,802) (1,933,417) (16,426) Purchases of treasury stock (1,500,185) (579) (16,485) Dividends paid (1,693,166) (1,128,634) (18,606) Other—net (1,111) — (12) Net cash used for fi nancing activities (3,100,578) (2,193,376) (34,072)Effect of exchange rate changes on cash and cash equivalents (842,896) (2,909) (9,262)Net increase in cash and cash equivalents (2,768,875) 111,598 (30,427)Cash and cash equivalents at the beginning of the year 13,520,940 13,409,342 148,581Cash and cash equivalents at the end of the year ¥10,752,065 ¥13,520,940 $118,154


TCL-08-AR.indd 14 09.6.12 10:37:08 AM

Tamron Co., Ltd. 15

notes to consolidated financial statementsTamron Co., Ltd. and Consolidated Subsidiaries

BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTSTamron Co., Ltd. (the Company) maintains its accounts and records in accordance with the provisions set forth in Japanese Commercial Code and the Financial Instruments and Exchange Law of Japan, and in conformity with accounting principles and practices generally accepted in Japan (Japanese GAAP). The accounts of overseas-consolidated sub-sidiaries are based on accounting records maintained in conformity with generally accepted accounting principles and practices prevailing in the countries of domicile. Certain accounting principles and practices generally accepted in Japan are different from International Accounting Standards and standards in other countries, particularly in respect to application and disclosure requirements; accordingly, the accompanying fi nancial statements are intended for use by those who are informed about Japanese accounting principles and practices. The accompanying consolidated fi nancial statements are a translation of the audited consolidated fi nancial statements of the Company, which were prepared in accordance with Japanese GAAP, and were fi led with the appropriate Local Finance Bureau of the Ministry of Finance, as required by the Financial Instruments and Exchange Law of Japan. The translation of Japanese yen amounts into U.S. dollars is included solely for the convenience of readers; the prevailing exchange rate on December 31, 2008, ¥91 per U.S. $1.00, was used. The translations should not be construed as representations of Japanese yen that have been, could have been, or could be converted into U.S. dollars in the future, at this rate or any other rate of exchange.

1. Scope of ConsolidationAll subsidiaries are consolidated.Number of consolidated subsidiaries: 6TAMRON USA, Inc.TAMRON Europe GmbH.TAMRON France EURL.TAMRON INDUSTRIES (HONG KONG) LIMITEDTAMRON OPTICAL (FOSHAN) CO., LTD.TAMRON OPTICAL (SHANGHAI) CO., LTD.

2. Application of the Equity MethodThe Company does not have any unconsolidated or affi liated companies, accordingly, the equity method is not applied.

3. Fiscal TermThe fi scal terms of each consolidated subsidiary are the same as the terms of the Company.

4. Accounting Policies(1) Methods for valuation of signif icant assetsa. Investments in securities With market quotations: stated at fair market value. Unrealized gains

and losses on these securities are reported, net of applicable income taxes, as a separate component of the net assets. Realized gains and losses on the sale of such securities are computed using the moving-average cost.

Without market quotations: stated at cost using the moving-average method.

b. Inventories The Company: valued at cost using the monthly moving-average

method. Consolidated subsidiaries: stated at the lower of cost, or market,

principally using the fi rst-in fi rst-out method.c. Derivatives Derivatives fi nancial positions are stated at fair value.

(2) Depreciation of f ixed assetsa. Tangible assets The Company: depreciation of depreciable assets other than build-

ings (excluding facilities attached) is principally computed using the declining-balance method, while the straight-line method is ap-plied for buildings (excluding facilities attached) acquired on or after April 1, 1998.

The estimated useful lives are as follows:

Buildings and structures 10 to 40 years Machinery and equipment 5 to 10 years

Consolidated subsidiaries: Computed by the straight-line method.

(Additional Information) Following the revised corporation tax law regarding to tangible fi xed

assets acquired on or before March 31, 2007, the difference between the residual value of 5% and memorandum value which is ordinary 1 Yen, is amortized using a straight line method over fi ve years starting from the next fi scal year following fi scal year in which book value of each asset equals to the 5% residual value. Impact of the change was not material for the year ended December 31, 2008.

b. Intangible assets Depreciation of intangible assets is computed by the straight-line

method. In-house use software is amortized over a fi ve-year period based on the assumed useful life.

(3) Reservesa. Reserves for doubtful accounts Reserves for doubtful accounts are generally provided based on ac-

tual collection losses incurred in the past. Additionally, for accounts receivable considered at risk (bankruptcy, companies under rehabilita-tion plan), an allowance is provided based on an estimation of the uncollectible amount, on a case-by-case basis.

b. Reserve for directors’ bonuses The amount reported on the balance sheet is based on the projected

bonus amount.c. Reserve for employees’ retirement benefi ts In order to provide for retirement benefi ts to be paid to employees,

the amount considered to have accrued, as at the end of the term, is stated, based on the estimated amount of retirement benefi t ob-ligations and pension plan assets, as at the end of the term. The actuarial gains (losses) will be recognized in expenses (income), in equal amounts, over a fi ve-year period, which is shorter than the average remaining service years of eligible employees, commencing with the next year of the accrual.

TCL-08-AR.indd 15 09.6.12 10:37:08 AM

16 Tamron Co., Ltd.

d. Reserve for directors’ retirement benefi ts (Additional Information) Until fi scal year 2007, the Company had accrued for the retirement

benefi ts for directors and corporate auditors, an amount deemed nec-essary at the term-end, in line with in-house regulations. However, at the general shareholders’ meeting held on March 28, 2008, the abolishment of such retirement plan was resolved. Accordingly the Company reclassifi ed the outstanding balance of “Reserve for Di-rectors’ Retirement Benefi t” at the end of the previous fi scal year as “Other” in long-term liabilities for fi scal year 2008.

e. Reserve for loss on withdrawal from Pension Fund The Company provided for the projected amount of special con-

tributions to be expended as a special loss in conjunction with the withdrawal from Pension Fund, which described bellow.

(Additional Information) At the Board of Directors’ meeting held on December 25, 2008, the

Company had resolved to withdraw from Social Welfare Pension Fund of Saitama Machine Industry, and provided for the projected amount of special contributions in conjunction with the withdrawal.

As a result, income before income taxes decreased by ¥1,149,664 thousand.

(4) Foreign currency translation of signif icant assets and liabilitiesForeign currency-denominated assets and liabilities held by the Company are translated into Japanese yen using exchange rates prevailing on the balance sheet date; and gains and losses on translation are charged to income. Relevant assets and liabilities held by subsidiaries are translated into Japanese yen using exchange rates prevailing on the balance sheet date; and revenues and expenses are translated using the average exchange rates during the term. Gains and losses on translation are charged to net assets under “Foreign currency translation adjustments.”

(5) Lease transactionsFinance lease transactions, excluding leases where the ownership of leased objects are deemed to be transferred to the lessee, were accounted for in the same manner as operating leases.

(6) Hedginga. Hedge accounting Derivative fi nancial instruments are stated at fair value and changes

in the fair value are recognized as gains or losses, unless derivative fi nancial instruments are used for hedging purposes. If derivative fi nancial instruments are used as hedges and meet certain hedging criteria, the Company defers recognition of gains or losses, resulting from changes in fair value of derivative fi nancial instruments, until the related losses or gains on the hedged items are recognized.

b. Hedge instruments and assets and liabilities being hedged Hedge instruments are foreign exchange forward contracts. Assets and

liabilities being hedged are foreign currency receivables and payables.c. Hedge transaction policies The Company engages in derivative transactions with the aim of

hedging risk on foreign exchange fl uctuations in accordance with in-house regulations.

d. Assessment of effectiveness of hedging The Company has realized a high correlation coeffi cient between

market f luctuations and cash f lows (assets and liabilities being hedged) and hedge instruments: it thereby highly evaluates the ef-fectiveness of the derivatives transactions in question.

(7) Other signif icant accounting policies for preparing consolidated f inancial statements

Consumption tax Consumption tax is not included.

5. Assets and Liabilities of Consolidated SubsidiariesAssets and liabilities of consolidated subsidiaries were valued at the fair value.

6. Scope of Cash and Cash Equivalents in the Statements of Cash FlowsIn preparing the consolidated statements of cash fl ows, cash on hand, readily available deposits, and short-term highly liquid investments, with maturity not exceeding three months at the time of purchase, are considered to be cash and cash equivalents.

NOTES TO CONSOLIDATED BALANCE SHEETS1. Assets pledged as collateral as of December 31, 2008(1) Property, plant and equipment

Thousands of Yen

Buildings and structures ¥ 862,112Machinery, equipment and vehicles 1,677,986Tools, furniture and fi xtures 207,780Land 96,179Other 11,049 Total ¥2,855,108

(2) OtherThousands of Yen

Buildings and structures ¥1,497,288Land 96,043 Total ¥1,593,332

notes to consolidated financial statements

TCL-08-AR.indd 16 09.6.12 10:37:08 AM

Tamron Co., Ltd. 17

(3) Loans secured by the above assetsThousands of Yen

Short-term loans payable ¥1,000,000Long-term loans payable (including loans due within one year) 1,785,216 Total ¥2,785,216

2. Accounting for notes matured at end of f iscal yearThe end of 2008 fi scal year coincided with a bank holiday, and the following notes that matured at the end of fi scal year were accounted for as if they were settled on their date of maturity.Notes receivable ¥13,491 thousand

NOTES TO CONSOLIDATED STATEMENTS OF INCOME1. Research and development expenses included in selling, general and administrative expenses and manufacturing costs totaled ¥3,222,195 thousand.

NOTES TO CONSOLIDATED STATEMENTS OF CASH FLOWSReconciliation between amounts shown in cash and cash equivalents at the end of the year on the statements of cash fl ows, and in cash and cash equivalents on the consolidated balance sheets, as of December 31, 2008, is as follows:Cash and cash equivalents on the statement of cash fl ows ¥10,752,065 thousandCash on hand and in banks at the end of the year ¥10,752,065 thousand

I. NOTES TO LEASESFinance leases are accounted for in the same manner as operating leases.1. Acquisition cost, accumulated depreciation and net book value of lease assets as of December 31, 2008

Thousands of Yen

Acquisition cost

Accumulated depreciation

Netbook value

Machinery, equipment and vehicles ¥620,725 ¥470,725 ¥149,999Tools, furniture and fi xtures 96,135 62,821 33,314Software 77,783 43,231 34,552 Total ¥794,644 ¥576,778 ¥217,866

2. Obligation under f inance leases as of December 31, 2008Thousands of Yen

Due within one year ¥106,415Due after one year 124,615 Total ¥231,030

3. Lease expenses, depreciation and interest expenses for the year ended December 31, 2008Thousands of Yen

Lease expenses ¥163,490Depreciation cost equivalent 148,294Interest expenses equivalent 9,457

4. Method of calculating depreciationDepreciation expense on leased assets is calculated by using the straight-line method, over the lease period and has a residual value of zero.

5. Method of calculating interest expenseThe difference between total lease expense and acquisition cost of leased assets, is considered as the interest portion, and the allocation of this interest is calculated by the interest method.

II. NOTES TO RELATED PARTY TRANSACTIONFiscal period 2007 Thousands of YenName of company Paid in capital Transaction Amount per year Year end balance

Sony EMCS Corporation 6,741,000 Sale of DSC lenses 14,254,146 2,171,027Sony Digital Products (Wuxi) Co., Ltd. US$30,470 thousand Sale of DSC lenses 12,189,059 1,353,491Notes: Sales prices are based on the arms’ length transaction basis.

TCL-08-AR.indd 17 09.6.12 10:37:08 AM

18 Tamron Co., Ltd.

Fiscal period 2008 Thousands of YenName of company Paid in capital Transaction Amount per year Year end balance

Sony EMCS Corporation 6,741,000 Sale of DSC lenses 17,444,268 1,237,334Sony Digital Products (Wuxi) Co., Ltd. 485,584 thousand RMB Sale of DSC lenses 8,875,963 1,248,435Notes: Sales prices are based on the arms’ length transaction basis.

III. NOTES TO INVESTMENTS IN SECURITIES1. With quoted market value

Thousands of YenType of securities As of December 31, 2007 As of December 31, 2008

Acquisition costs

Carrying amount Difference

Acquisition costs

Carrying amount Difference

Securities whose carrying amounts on consolidated balance sheets exceed their acquisition costs

(1) Stocks ¥611,453 ¥809,872 ¥198,419 ¥ 108,867 ¥ 175,617 ¥ 66,749(2) Debt securities — — — — — —(3) Others — — — — — —

Total 611,453 809,872 198,419 108,867 175,617 66,749Securities whose carrying amounts on consolidated balance sheets does not exceed their acquisition costs

(1) Stocks 44,244 43,079 (1,164) 672,930 597,994 (74,935)(2) Debt securities — — — — — —(3) Others — — — 300,000 292,320 (7,680)

Total 44,244 43,079 (1,164) 972,930 890,314 (82,615) Total ¥655,697 ¥852,951 ¥197,254 ¥1,081,797 ¥1,065,931 ¥(15,865)

Notes:The Company shall write down the stocks, whose fair market values fall below 50% or more of acquisition costs; and for those securities, whose fair market values fall between 30% or more and 50% or less, and whose fair market values were not judged to recover, a write down for those securities will also be made. Based on the above policy, in fi scal year 2008, the Company made write-down of ¥354,819 thousand on investment securities.

2. Other Securities soldFiscal period 2007 Thousands of Yen

Amount of other securities sold ¥230,692Gains 31,702Losses —

Fiscal period 2008

Disclosure is omitted as there were no signifi cant gains/losses on sale of other securities.

3. Without quoted market valueThousands of Yen

As of December 31, 2007

Carrying amount

As of December 31, 2008

Carrying amount

Other type of securities Non-listed securities (excluding OTC securities) ¥710 ¥710

IV. NOTES TO DERIVATIVESCurrent transactions(1) Derivative fi nancial instrumentsDerivative fi nancial instruments utilized by the Company are comprised principally of foreign exchange forward contracts and currency options. Consolidated subsidiaries do not utilize derivative fi nancial instruments.

(2) Policy relating to derivative fi nancial instrumentsThe Company is exposed to market risks from changes in foreign currency exchange rates and interest rates, and enters into fi nancial instruments and derivative fi nancial instruments for the purpose of reducing such risks. The Company does not hold or issue derivative fi nancial instruments for speculation.


TCL-08-AR.indd 18 09.6.12 10:37:08 AM

Tamron Co., Ltd. 19

(3) ObjectivesThe Company utilizes derivative transactions to secure stable profi ts by hedging against those risks arising from changes in foreign exchange rates in connection with its foreign currency assets and liabilities. The Company adopts hedge accounting in connection to the application of derivative transactions. Hedge Accounting Methodology The Company applies the deferral hedge method in hedge accounting, if certain hedging criteria are met. Foreign exchange forward contracts

are accounted for by using the appropriated method for contracts that fulfi ll requirements for appropriated method hedge accounting. Hedging Instruments and Coverage The Company uses foreign exchange forward contracts and currency option transactions as hedging instruments. Hedging covers foreign-

currency-denominated receivables and payables, as well as scheduled transactions in foreign currency. Hedging Method Based on internal rules for derivative transactions, the Company hedges against the risk of fl uctuations in foreign currency exchange rates. Evaluation of Hedging Effectiveness The Company evaluates the effectiveness of hedging based on the strong correlation between changes in market rates under hedging coverage,

cash fl ow, and hedging instruments.

(4) Transaction riskForeign exchange forward contracts and other transactions carry the risk of changes in exchange rates. However, derivative transactions conducted by the Company are entirely for the purpose of hedging, and the Company does not engage in transactions that may have a signifi cant impact on management. In addition, transactions are conducted with fi nancial institutions with high credit ratings. As a result, there is minimal credit risk.

(5) Transaction risk management structureThe Company has rules for transaction management that determine a maximum limit and authority on derivative transactions. Based on these rules, the accounting department administers the transactions and risk management with the approval of the management.

Market value of transactionsAll derivative transactions fall under hedge accounting, accordingly the market value information is not required.

V. NOTES TO RETIREMENT BENEFITS AS OF DECEMBER 31, 20081. Retirement and pension plansThe Company has defi ned benefi t pension plans comprising a welfare pension fund plan, a qualifi ed pension plan and a lump-sum retirement pension plan. The Company may pay additional benefi t when employees retire. Some overseas consolidated subsidiaries adopt defi ned-contribution pension plans. In addition, the Company recognizes required contributions to a multi-employer pension plan as retirement benefi t expenses. Details are as follows.

(1) Financial status of the multi-employer pension plan in which the Company participatedThousands of Yen

Asset ¥74,388,811Actuarial valuation of benefi t obligation ¥91,420,959Difference (¥17,032,147)

(2) The Company’s current share of the contribution in the planBased on the contribution of March 2009 6.29%

(3) Supplementary informationThe aforementioned difference resulted mainly from the actuarial balance of the past service liabilities of ¥15,415,299 thousand. The plan ad-opted a level payment method over 20 years for the amortization of past service liabilities. The Company, however, expensed ¥91,595 thousand for special contribution related to the past service obligation in the current consolidated fi nancial statements. The share stated in the above (2) does not correspond to the actual obligation share of the Company in the plan.

TCL-08-AR.indd 19 09.6.12 10:37:08 AM

20 Tamron Co., Ltd.

2. Retirement benef it obligationThousands of Yen

(1) Retirement benefi t obligations ¥(2,073,678)(2) Plan assets at fair value 686,272(3) Unfunded retirement benefi t obligations (1)+(2) (1,387,406)(4) Unrecognized actuarial loss 330,373(5) Net balance sheet amount (3)+(4) (1,057,032)(6) Prepaid pension expense 77,696(7) Accrued retirement benefi ts (5)-(6) ¥(1,134,728)

3. Retirement benef it expenses for f iscal year 2008Thousands of Yen

(1) Service expenses ¥374,737(2) Interest expenses 39,350(3) Expected return on plan assets (15,861)(4) Amortization of net actuarial difference (32,194)(5) Retirement benefi t expenses (1) + (2) + (3) + (4) ¥366,032

Note: A contribution amount of ¥247,813 thousand to the welfare pension fund is included in service expenses.

4. Basis for calculation of retirement benef it obligation

(1) Periodic allocation method for projected benefi ts Straight-line method(2) Discount rate 2.0%(3) Expected rate of return on plan assets 2.0%(4) Amortization period for net actuarial difference 5 years

(Additional Information)The Company adopted the Accounting Standard - ASBJ Statement No. 14 Partial Amendments to Accounting Standard for Retirement Benefi ts (Part2).starting from this fi scal year 2008.

VI. NOTES TO ACCOUNTING FOR DEFERRED INCOME TAX(1) Breakdown of the major components for deferred tax assets and liabilities as of December 31, 2008Deferred Tax Assets

Thousands of Yen

Accrued enterprise tax ¥ 62,207Reserve for doubtful accounts 18,062Unrealized intercompany profi ts 214,112Reserve for employees’ retirement benefi ts 463,838Reserve for loss on withdrawal from Pension Fund 464,464Subsidiaries’ net operating tax loss carryforwards 26,905Long-term accounts payable 101,581Loss on devaluation of inventories 41,496Depreciation and amortization 66,072Unrealized loss on investment securities 33,376Other 88,890Subtotal 1,581,009Valuation allowance assets (26,905)Total of deferred tax assets ¥1,554,103

Deferred Tax LiabilitiesThousands of Yen

Reserve for deduction entries ¥ (55,973)Unrealized gain on investments in securities (26,966)Total of deferred tax liabilities (82,940)

Net deferred tax assets ¥1,471,163


TCL-08-AR.indd 20 09.6.12 10:37:08 AM

Tamron Co., Ltd. 21

(2) Reconciliation of the statutory tax rate and the effective tax rate

Statutory tax rate 40.4%(Adjustments)Permanent non-deductible expenses (entertainment expenses) 0.7Non-deductible donations 0.4Per capita tax 0.4Directors’ bonuses 0.6Tax deductions (12.8)Difference in tax rates applicable to overseas subsidiaries (14.6)Elimination of dividend income 15.7Taxable revenues of certain foreign subsidiaries (1.2)Other 0.6Effective tax rate 30.2%

VII. NOTES TO SEGMENT INFORMATIONBusiness segment information

Thousands of Yen

2007

Photographic products

Optical components

Commercial/ industrial-use

optics Total

Eliminations and/or

corporate Consolidated

Net sales: Sales to outside customers ¥25,345,885 ¥35,056,243 ¥7,802,713 ¥68,204,841 — ¥68,204,841 Intersegment sales or transfer — — — — — — Total 25,345,885 35,056,243 7,802,713 68,204,841 — 68,204,841Operating expenses 20,357,647 30,168,864 7,050,351 57,576,863 1,839,017 59,415,880Operating income ¥4,988,238 ¥4,887,378 ¥752,362 ¥10,627,978 ¥(1,839,017) ¥8,788,960Assets ¥17,347,209 ¥17,231,136 ¥7,620,069 ¥42,198,414 ¥ 9,952,878 ¥52,151,293Depreciation expenses 1,129,455 932,239 956,350 3,018,046 88,568 3,106,615Capital expenditures 1,638,712 1,808,999 779,172 4,226,884 111,432 4,338,317

Thousands of Yen

2008

Photographic products

Optical components

Commercial/ industrial-use

optics Total

Eliminations and/or


Net sales: Sales to outside customers ¥28,938,045 ¥25,014,188 ¥8,585,739 ¥62,537,972 — ¥62,537,972 Intersegment sales or transfer — — — — — — Total 28,938,045 25,014,188 8,585,739 62,537,972 — 62,537,972Operating expenses 25,437,241 21,507,571 7,241,603 54,186,416 2,153,142 56,339,559Operating income ¥ 3,500,803 ¥ 3,506,617 ¥1,344,135 ¥ 8,351,555 ¥ (2,153,142) ¥ 6,198,413Assets ¥21,040,153 ¥11,407,163 ¥6,046,199 ¥38,493,516 ¥10,682,954 ¥49,176,471Depreciation expenses 1,937,033 1,469,319 649,342 4,055,696 44,625 4,100,322Capital expenditures 2,064,894 1,980,768 659,087 4,704,751 67,511 4,772,262

Notes:1. Business segmentation

Main products by business segment are as follows:(1) Photographic products

Interchangeable lenses for SLR camera(2) Optical components

Camcorder lenses, digital still camera lenses, cellular phone camera lenses(3) Commercial/industrial-use optics

Lenses for CCTV cameras, projection lenses, high-precision molds, injection-molded parts & components, optical device units

TCL-08-AR.indd 21 09.6.12 10:37:09 AM

22 Tamron Co., Ltd.

2. Unallocated operating expenses included in “Eliminations and/or corporate” totaled ¥1,839,017 thousand for fi scal year ended December 31, 2007. These expenses consisted principally of expenses related to general affairs, accounting and other departments of the Company. Unal-located operating expenses included in “Eliminations and/or corporate” totaled ¥2,153,142 thousand for fi scal year ended December 31, 2008. These expenses consisted principally of expenses related to general affairs, accounting and other departments of the Company.

3. As of December 31, 2007, total assets included in “Eliminations and/or corporate” of ¥9,952,878 thousand, mainly represent cash, long-term investment funds (investments in securities), and assets related to the administration department. As of December 31, 2008, total assets included in “Eliminations and/or corporate” of ¥10,682,954 thousand, mainly represent cash, long-term investments funds (investments in securities), and assets related to the administration department.

4. As stated in “Basis of Presenting Consolidated Financial Statements,” effective from fi scal year 2007, the depreciation method of tangible fi xed assets acquired after April 1, 2007 was aligned with the method, under revised Corporate Tax Law. Due to the change, the operating income of Photographic products business segment, Optical components business segment, Commercial/industrial-use optics business segment and “Eliminations and/or corporate” decreased by ¥59,209 thousand, ¥11,063 thousand, ¥27,928 thousand and ¥2,697 thousand respectively.

Geographical segment informationThousands of Yen

2007

Japan North America Europe Asia Total

Eliminations and/or


Net sales: Sales to outside customers ¥52,861,298 ¥5,325,024 ¥6,563,280 ¥ 3,455,238 ¥ 68,204,841 — ¥68,204,841 Intersegment sales or transfer 9,588,668 — — 35,951,141 45,539,809 (45,539,809) — Total 62,449,966 5,325,024 6,563,280 39,406,380 113,744,651 (45,539,809) 68,204,841Operating expenses 56,089,637 4,758,330 5,532,341 36,516,104 102,896,414 (43,480,533) 59,415,880Operating income ¥ 6,360,328 ¥ 566,693 ¥1,030,938 ¥ 2,890,275 ¥ 10,848,236 ¥ (2,059,275) ¥ 8,788,960Assets ¥26,970,478 ¥2,193,438 ¥2,869,685 ¥13,490,102 ¥ 45,523,705 ¥ 6,627,588 ¥52,151,293

Thousands of Yen

2008

Japan North America Europe Asia Total

Eliminations and/or


Net sales: Sales to outside customers ¥47,896,732 ¥4,784,994 ¥7,399,399 ¥ 2,456,846 ¥ 62,537,972 — ¥62,537,972 Intersegment sales or transfer 10,517,635 — 140 29,188,411 39,706,186 (39,706,186) — Total 58,414,367 4,784,994 7,399,540 31,645,257 102,244,159 (39,706,186) 62,537,972Operating expenses 53,223,128 4,533,916 6,569,057 29,389,919 93,716,022 (37,376,462) 56,339,559Operating income ¥ 5,191,238 ¥ 251,077 ¥ 830,482 ¥ 2,255,377 ¥ 8,528,137 ¥ (2,329,724) ¥ 6,198,413Assets ¥25,177,386 ¥2,347,242 ¥3,247,497 ¥11,613,911 ¥ 42,386,038 ¥ 6,790,433 ¥49,176,471

Notes:1. Country and regional segments are classifi ed on the basis of geographic proximity.2. Principal markets in the above designated areas:

(1) North America: U.S.A.(2) Europe: Germany, France(3) Asia: Hong Kong, China

3. Unallocated operating expenses included in “Eliminations and/or corporate” totaled ¥1,839,017 thousand for fi scal year ended December 31, 2007. These expenses consisted principally of expenses related to general affairs, accounting and other departments of the Company. Unal-located operating expenses included in “Eliminations and/or corporate” totaled ¥2,153,142 thousand for fi scal year ended December 31, 2008. These expenses consisted principally of expenses related to general affairs, accounting and other departments of the Company.

4. As of December 31, 2007, total assets included in “Eliminations and/or corporate” of ¥9,952,878 thousand, mainly represent cash, long-term investment funds (investments in securities), and assets related to the administration department. As of December 31, 2008, total assets included in “Eliminations and/or corporate” of ¥10,682,954 thousand, mainly represent cash, long-term investment funds (investments in securities), and assets related to the administration department.

5. As stated in “Basis of Presenting Consolidated Financial Statements” effective from fi scal year 2007, the depreciation method of tangible fi xed assets acquired after April 1, 2007 was aligned with the method, under revised Corporate Tax Law. Due to the change, the operating income of Japan and “Eliminations and/or corporate” decreased by ¥98,200 thousand and ¥2,697 thousand respectively.


TCL-08-AR.indd 22 09.6.12 10:37:09 AM

Tamron Co., Ltd. 23

Overseas salesThousands of Yen

2007

North America Europe Asia Total

I Overseas sales ¥5,664,636 ¥7,825,259 ¥28,879,882 ¥42,369,779II Consolidated sales 68,204,841III Percentage of consolidated sales (%) 8.3 11.5 42.3 62.1

Thousands of Yen

2008

North America Europe Asia Total

I Overseas sales ¥5,246,528 ¥8,580,864 ¥22,903,418 ¥36,730,811II Consolidated sales 62,537,972III Percentage of consolidated sales (%) 8.4 13.7 36.6 58.7

Notes:1. Country and regional segments are classifi ed on the basis of geographic proximity.2. Principal markets in the above designated areas:

(1) North America: U.S.A., Canada(2) Europe: Germany, U.K., France, Northern Europe and other European countries(3) Asia: Hong Kong, China and other Asian countries

3. Overseas sales represent those of Tamron Co., Ltd. and consolidated companies in countries and regions other than Japan.

VIII. NOTES TO PER SHARE INFORMATIONYear ended December 31, 2008:Net assets per share 1,206.77 YenNet income per share 108.41 Yen

Information for diluted net income per share is omitted because potentially dilutive securities are not issued.

Note: The basis for calculating net income per share is as follows.

2007 2008

Net income (Thousands of Yen) ¥ 4,772,557 ¥ 3,029,260Amount not belong to ordinary shareholders (Thousands of Yen) — —Net income for ordinary shares (Thousands of Yen) 4,772,557 3,029,260Average number of shares outstanding during the term (Shares) 28,208,891 27,942,758

IX. NOTES TO SUBSEQUENT EVENTSNot applicable.

TCL-08-AR.indd 23 09.6.12 10:37:09 AM

24 Tamron Co., Ltd.

To the Board of Directors of

Tamron Co., Ltd.

We have audited the accompanying consolidated balance sheet of Tamron Co., Ltd. and its subsidiaries as of Decem-

ber 31, 2008, and the related consolidated statement of income, net assets, and cash fl ows for the year then ended. These

consolidated fi nancial statements are the responsibility of the Company’s management. Our responsibility is to express an

opinion on these consolidated fi nancial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the consolidated fi nancial statements are

free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclo-

sures in the consolidated fi nancial statements. An audit also includes assessing the accounting principles used and signifi -

cant estimates made by management, as well as evaluating the overall consolidated fi nancial statement presentation. We

believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated fi nancial statements referred to above present fairly, in all material respects, the fi nan-

cial position of Tamron Co., Ltd. and its subsidiaries as of December 31, 2008, and the result of their operations and their

cash fl ows for the year then ended, in conformity with accounting principles generally accepted in Japan.

The United States dollar amounts shown in the consolidated fi nancial statements have been translated solely for con-

venience. We have reviewed this translation and, in our opinion, the consolidated fi nancial statements expressed in Japa-

nese Yen have been translated into United States dollars on the basis described in Note 1.

Tokyo, Japan

March 23, 2009

Wako Audit Corporation

independent auditors’ report

TCL-08-AR.indd 24 09.6.12 10:37:09 AM

Tamron Co., Ltd. 25

Principal Shareholders (As of December 31, 2008) Number of Shares Held Percentage of Shareholders (Thousands of Shares) Shares Held

New Well Co., Ltd. 4,898 17.34Sony Corporation 3,129 11.08Kouyu Kosan Co., Ltd. 1,529 5.41State Street Bank and Trust Comapny 1,361 4.82Saitama Resona Bank Limited 1,122 3.97The Chase Manhattan Bank N.A., London 1,079 3.82Japan Trustee Services Bank, Ltd. (trust account 4G) 936 3.31Japan Trustee Services Bank, Ltd. (trust account) 797 2.82The Master Trust Bank of Japan, Ltd. (trust account) 509 1.80Tamron Business Partner Stock Holding Plan 434 1.53Note: The 3,129 thousand shares owned by Sony Corporation are fi duciary assets trusted to

Mizuho Trust & Banking Co., Ltd. In regard to the execution of voting rights and jus disposition of the shares, Sony Corporation reserves the right to instruct pursuant to the provisions of the trust contract between the two parties.

Tamron Co., Ltd. owns 784 thousand (2.77%) shares of treasury stock (excluded from the table above).

investor information

Shareholders’ MemoBalance date:December 31

Scheduled Annual Shareholders Meeting:March

Eligibility date for year-end dividend payments:December 31

Eligibility date for interim dividend payments:June 30

Transfer Agent:33-1, Shiba 3-chome, Minato-ku, Tokyo, JapanThe Chuo Mitsui Trust and Banking Company, Limited

Stock trading unit:100 shares

Announcements:Nihon Keizai Shimbun

Company Profi leCompany Name:Tamron Co., Ltd.

Established:November 1, 1950

Incorporated:October 27, 1952

Headquarters:1385, Hasunuma, Minuma-ku, Saitama-shi, Saitama 337-8556 JAPAN

Capital:¥6,923 million

Fiscal Year-End:End of December

Employees:5,571 (Consolidated) (As of December 31, 2008)

management(As of March 27, 2009)

BOARD OF DIRECTORS

President & CEOMorio Ono

Corporate Vice PresidentShoji Kono

Corporate Vice PresidentHitoshi Ohta

Senior Managing DirectorYoshihiro Shirai

Senior Managing DirectorHisaaki Nagashima

Managing DirectorTakashi Kawai

DirectorKoji Seki

DirectorHiroaki Arai

DirectorTadahiro Shimura

CORPORATE AUDITORS (Note)

Standing Corporate AuditorKiyoshi Okawa

Standing Corporate AuditorYukio Masuko

Corporate AuditorNorio Tomiyoshi

Corporate AuditorYasuhiko Nishimoto

EXECUTIVE OFFICERS

Senior Executive Offi cerShinichi Yasuda

Senior Executive Offi cerShoei Kawamura

Senior Executive Offi cerTakashi Ichikawa

Senior Executive Offi cerKaoru Takahashi

Senior Executive Offi cerHideyo Ohse

Senior Executive Offi cerMasayuki Abo

Senior Executive Offi cerShiro Ajisaka

Senior Executive Offi cerShogo Sakuraba

Senior Executive Offi cerYoshiyuki Shirai

Executive Offi cerHiroshi Kawanabe

Executive Offi cerKunio Wada

Executive Offi cerYasuki Kitazume

Executive Offi cerSatoshi Hasegawa

Executive Offi cerMiharu Takeuchi

Executive Offi cerKaoru Nagano

Executive Offi cerMichiko Chiyoda

Executive Offi cerMasaki Kudoh

Note: Mr. Masuko, Mr. Tomiyoshi, and Mr. Nishimoto are external corporate auditors as per Article 18.1 of the “Law for Special Exceptions to the Commercial Code Concerning Audit, etc. of Kabushiki-Kaisha.”

TCL-08-AR.indd 25 09.6.12 10:37:09 AM

group network

Hirosaki Plant3-2, Shimizu 3-chome, Hirosaki-shi, Aomori 036-8254 JAPANTel:+81-172-34-1144Fax:+81-172-33-2340ISO9001/ISO14001 Certifi ed

Namioka Plant64-1, Shimoshimada, Kitanakano, Namioka, Aomori-shi,Aomori 038-1325 JAPANTel:+81-172-62-9555Fax:+81-172-62-9302ISO9001/ISO14001 Certifi ed

Owani Plant31-1, Maeda, Hachimandate, Owani-machi, Minamitsugaru-gun, Aomori 038-0243 JAPANTel:+81-172-47-6713Fax:+81-172-47-6715ISO9001/ISO14001 Certifi ed

TAMRON OPTICAL (FOSHAN) CO., LTD.West of Langbao Road City-West Industrial Development Zone Foshan, Guangdong, CHINATel:+86-757-82982222Fax:+86-757-82203442http://www.tamron.com.cnISO9001/ISO14001 Certifi ed

TAMRON USA, INC.10 Austin Boulevard, Commack, NY 11725 USATel:+1-631-858-8400Fax:+1-631-543-3963http://www.tamron.com

TAMRON Europe GmbH.Robert Bosch-Str. 9, 50769 Cologne, GERMANYTel:+49-221-970325-0Fax:+49-221-970325-4http://www.tamron.de

TAMRON France EURL.5, avenue Georges Bataille, F-60330Le Plessis-Belleville Boite postale 31, FRANCETel:+33-3-44-60-73-00Fax:+33-3-44-60-23-34http://www.tamron.de

TAMRON INDUSTRIES(HONG KONG) LIMITEDUnits 25&27&29&31, 9th Floor, Hong Kong International Trade & Exhibition Center, 1 Trademart Drive, Kowloon Bay, Hong KongTel:+852-2721-7797Fax:+852-2620-1631http://www.tamron.com.hk

TAMRON OPTICAL (SHANGHAI) CO., LTD.Room 1707,Ruijin Building,No. 205, Maoming South Road,Shanghai 200020CHINATel:+86-21-5102-8880Fax:+86-21-5466-0229http://www.tamron.com.cn

Tokyo Sales Offi ce5th Floor, 14, Kandahigashimatsushita-cho, Chiyoda-ku, Tokyo 101-0042 JAPANTel:+81-3-3251-3856 Fax:+81-3-3251-3857

Osaka Sales Offi ce6th Floor, 4-1, Minamisenba 2-chome, Chuo-ku, Osaka-shi, Osaka 542-0081 JAPANTel:+81-6-6271-4281 Fax:+81-6-6271-4283

Tamron Co., Ltd.1385, Hasunuma, Minuma-ku, Saitama-shi, Saitama 337-8556 JAPANTel: +81-48-684-9111Fax: +81-48-683-8289http://www.tamron.co.jpISO9001/ISO14001 Certifi ed

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Annual Report 2008 · 2017. 1. 27. · 2 Tamron Co., Ltd. It is my pleasure to present a report on...

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